Wednesday, December 8, 2010

The Great Depression I

Describe the factors that led to the Great Depression.  In your opinion, what was the biggest factor?  Describe the efforts taken by The Hoover Administration to combat the Depression.

13 comments:

  1. The great depression was not just one simple act that toppled the "Great America", in fact, it was numerous things that sent America tumbling down the road of poverty. America was already haveing trouble selling the products from farmers and industries, numerous times the government had to give money to the farmers so they could pay there morgages. Times were hard no one was selling, because the average consumer was poor. If farmers couldn't pay their morgages, how could the average joe. So instead, the average joe pays with credit, but once again he doesn't have money to pay of his credit. So now the producer thinks he needs to manufacter more because the average joe bought more then what he needed. More manufater plus no consuper equals a huge debt, America was stuck in a hole. What dugg Aerica even deeper into their own depression was the Hawley-smott tariff, which set the prices of foregin goods to and even higher rate which no one could afford. Prices were already to high, so the foregins decided to get revenage and set their tarrifs even higher. Now no one makes makeing money. America was now makeing nothing! Hoover did not stand by and watch, instead he let the government fund contruction and relief programs. He also created self-liquidating programs. Hoover did not stand by and watch as his country suffere, instead he stepped into action
    (moreland)
    http://www.u-s-history.com/pages/h1569.html
    http://www.u-s-history.com/pages/h1445.html

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  2. Some factors that led to the Great Depression were: the stock market's crash, bank failures, and the Haley-Smooth Tariff. The stock market crashed because of the automobile industry stocks, where prices on the stocks were increased. Communications were also affected by these price increases. Many Americans though that if they invested a lot of money in stock, they could become rich fast. When they ran out of money, they began to buy stocks on credit, which was a bad idea. "Unfortunately for them, beginning in September 1929, the stock market began to decline in value as larger investors realized that the stocks were inflated in price. On October 23, the stock market lost thirty-one points -- approximately seven percent of its value."
    As for the bank failures, the stock market crash obligated the banks to close their gates and find keep what little money they had not invested and lost in the stock market. Factories that had left and lost their money in the banks were now forced to lower their prices for their goods sold. This was a bad move for them because if they lowered their prices, they did not make a profit. If they did not make a profit, they would have to cut workforce. If they cut workforce, there would be unemployed families. This chain reaction was a terrible move and was a reason for Americans to blame the new president Herbert Hoover.
    The Haley-Smooth Tariff was a raise on average agricultural rates, sugar, and goods. The US population was outraged by this tax-hike, and the trading nations retaliated with their own tax-hikes. This caused the world to go through a depression themselves.
    The Hoover Administration tried to launch road, airport, and public transportation programs. This would help increase the country's credit facilities and strengthen the bank systems. The government gave out 2 billion dollars to help out the banks and other facilities to try and balance the economy.
    I think the biggest factor was the fact that people put their money into stocks to attempt a get-rich-quick scheme. This was a failure and an embarassment for them.

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  3. http://www.u-s-history.com/pages/h1569.html
    http://www.ohiohistorycentral.org/entry.php?rec=559
    http://www.ohiohistorycentral.org/entry.php?rec=467

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  4. There were various factors that led to the Great Depression. Farming problems came into play because there was now less of a need for farm products and farmers had little money. Another factor was the high tariffs and war debt, the war debts could not be paid to US foreign countries because of the high tariff and the foreign nations raised their tariff in retaliation. The wealth of the few was a problem because if others had money they would have been able to purchase consumer goods and keep the money flowing. Overproduction and buying on credit played a big part in the cause of the Great Depression, buying on credit hid the fact that people could not actually pay their debts.
    I think that the biggest factor that led to the Great Depression was the overproduction and buying on credit as well as bank failures. With overproduction companies produced more then people were buying which devalued the product itself. With bank failures, the little money people did have were taken from them every time a bank failed.

    Bought to you by; Moreland Notes

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  5. There were multiple factors that led to the Great Depression in the 1930's. Distribution of wealth was a major factor in the population. Only a few people had the money and others had only a little. The distribution of wealth also led to the over use of credit. The part of the population that did not have that much money used credit to buy common items. When they did this they owed money to the store, then they didn't have the money to pay the store back. This led to bankruptcy of the store. The store would also owe the company of the items money and when they didn't get paid, they also went out of business. Dept was a major part of the causes of the Great Depression. War dept was the highest since the U.S. did not have any money to pay it off, and that affected the whole country. In my opinion, the biggest factor was the over use of credit. So many businesses went out of business which caused the economy to drop even more. It caused a stop in the flow of money. Hoover took a few steps in creating a fix in the economy. For one, he created many jobs for the people of the U.S. such as building roads and bridges. For example, he created jobs by having them build the Hoover Dam.

    -Heather Roberts

    Moorland's notes

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  6. There were many factors that led to the Great Depression. In my opinion using credit was the biggest factor. During this period, many people were buying things that were too expensive for them. So in order to pay the things off they paid by credit. So when the companies saw that they were selling a lot of a product they would make and sell more. So eventually people were buying these expensive items and never paying them off. This eventually led to mass production and credit problems. To fix this problem, Hoover took many steps. But the biggest step he took was creating more jobs. This helped so many more people could get their life back on track.


    Kayleigh Andrews

    Citation: Moreland's Class Notes

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  7. This comment has been removed by the author.

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  8. During World War I, booms in U.S. production were created to keep up with the ever increasing amount of food, ammunition, and supplies needed to nourish the Allied troops and combat the Central Powers. When the war ended, the rate of production did not decrease with it. Instead production kept on increasing and this lead to the national internal debt of the country. The American farming industry is a prime example of this. Farming production increased with the number of mouths American needed to feed due to the War of Wars. The price of the crops never dropped during war, encouraging farmers to continue with this course of action. After the war ended, the effects of supply and demand began to show. High supply (lots of crops) plus low demand (prosperity felt during the Roaring Twenties, after World War 1) caused the cost of crops to lower drastically. With a lower cost and low demand, farmers were unable to sell as much as usual and even if they did it wouldn’t yield the same profit. With less profit farmers were unable to pay for the machines that made planting crops and the homes and land they owned, causing some to take out credit that they could not pay back. Because of this, many farmers (1 out of 4 in fact!!!) sold their farms due to debt from credit, taxes or a combination of the two.

    The debt incurred due to low demand and high supply would not have been much of a financial problem for the U.S., had countries paid off their debts. But many of the allied countries refused, seeing this request by the U.S. as unfair. The U.S. refused to call off debts. Eventually, a financial cycle was created to pay off debts. The U.S. bankers gave loans to Germany, who intern paid reparations to France and Britain, who intern paid their war debts to the U.S. This cycle was incredibly unstable. This became recognized when the monetary supply of the U.S. banks finally dried up, causing bank failure. Of course, the U.S. was paid back the debts owed to it. With the U.S internally in debt, none of the countries paying off their debts, and the increased use of credit in financial transactions, the U.S. fell into a depression. This fact truly became evident to the public through the Stock Crash of 1929. After this event, the U.S. was officially in The Great Depression.

    Herbert Hoover, President during the beginning and middle stages of the Great Depression, attempted to revitalize the American, and consequentially the world, economy through numerous acts. One of these acts was the creation of the Reconstruction Finance Corporation designed to provide assistance to insurance companies, banks, agricultural organizations, railroads, basically anything that was a major factor in the monetary flow in America. The Hoover administration also attempted to assist the labor industry with the Norris-La Guardia Anti-Injunction Act of 1932. Hoover is known for his heartlessness in the presidency, however, despite general believe, Hoover attempted to get his country out of the Great Depression.

    -Kennedy Book-

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  9. The Great Depression is often related to President Herbert Hoover and the Stock Market crash of 1929. However, there are many factors which truly had an impact on America entering a severe depression, including farming problems, high tariffs/war debts, wealth of the few, overproduction, buying on credit, bank failures, and false prosperity.

    At this time, farmers were having a lot of trouble. First of all, there was less of a need for farm products at this time period. Also, although the government aided them with money, the farmers still were not very wealthy. Another cause of their problems was that after World War I, they were left with a surplus of products.

    Additionally, the high tariffs and war debts were another issue which led to the Great Depression. Basically, America placed a tax on imports so that American services would be protected. However, this caused a problem once foreign countries could not afford to pay off their debts to America. In retaliation, these countries placed high tariffs on their own products. This ultimately caused an even greater conflict because trade was reduced even more.

    In my opinion, one of the most significant factors that led to the Great Depression—and continues to affect America economically—is the issue of ‘wealth of the few’. It is a way of life in America’s capitalist system that only a very few amount of people will have the majority of the money. This always causes issues in America’s economy because the rest of society cannot purchase goods, and in the end, this means that the money is not flowing.

    Besides these issues, there were other factors such as overproduction and the introduction of buying on credit. Debts were increasing in the country because on one hand, companies produced more than people were buying, and on the other hand, people bought goods on credit; credit hid the fact that people were going into debt. Also, unlike the bank systems we have in place today, at that time, there were thousands of small banks, rather than a few chains of banks. This obviously did have an impact on America entering the depression; Canada only had FIVE banks, and this proved to be beneficial to them. As the small banks in America failed, people lost money and banks closed down. Lastly, there was false prosperity in America. An example of this is the assembly line process started by Henry Ford; he price of the Model T was lowered once this process was developed, bringing about false prosperity.

    “Although [Herbert] Hoover has been blamed for the stock market crash, he, in fact, warned President Coolidge in 1925 about the dangers of excessive stock market speculation. He again expressed concern while running for president in 1928… After the crash, Hoover ordered federal departments to speed up construction projects, cut $160 million in taxes, and doubled the amount spent on public works.” Despite the fact that Hoover was often blamed for the depression, and many Americans rejected him because he did not have much of a ‘hands-on’ approach to combating the crisis, in actuality, Hoover was hopeful that Americans would try to find ways to fix the economy themselves. Although, through the efforts stated previously, it is apparent that the Great Depression was not his fault; in fact, America was already on their way to entering a depression before he was in office.

    Works Cited:
    Moreland's notes (12-7-10)
    http://www.u-s-history.com/pages/h1580.html

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  10. The factors that led to the Great Depression were many. The stock market crash of 1929 resulted in the loss of more than $40 billion dollars for investors. Due to the overwhelming investment in automobile industry stocks, Americans had nowhere to go but down, when the market crashed. Moreover, throughout the 1930's, a copious amount of banks failed. “Bank deposits were uninsured and thus as banks failed people simply lost their savings.” In addition, the Hawley-Smoot Tariff was a raise on average agricultural rates, sugar, and goods. America and surrounding nations were hit hard by this increase of tax, further expanding the depression. These factors, as well as the drought conditions in parts of America and a decline in the purchasing across the board, caused the Great Depression.

    In my opinion, the biggest factor leading to the Great Depression was the overwhelming amount of debt America gained and deflation. Irving Fisher saw the connection between loose credit and over-indebtedness. Under over-indebtedness, debt liquidation and distress selling, contraction of the money supply as bank loans are paid off, a fall in the level of asset prices, a still greater fall in the net worths of business, precipitating bankruptcies, a fall in profits, a reduction in output, in trade and in employment, pessimism and loss of confidence, hoarding of money, and a fall in nominal interest rates and a rise in deflation adjusted interest rates greatly contributed to the Great Depression and the money catastrophe was prevalent in the lives of Americans during the 1930's.

    The efforts taken by The Hoover Administration to combat the Depression remain honorable, in terms of effectiveness and their overall motives. Hoover vividly exclaimed the possibility of a crash in the stock markets, but many public officials did not heed to his word. Hoover and his administration made much needed tax cuts and created the Reconstruction Finance Corporation. This act was made to help out railroads, insurance companies, and agricultural organizations. Hoover did what he could to aid the Americans in their time of great need. CUT HOOVER SOME SLACK!!!

    Chris Price

    Moreland’s Notes
    http://en.wikipedia.org/wiki/Causes_of_the_Great_Depression#Debt_deflation

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  11. One of the many reasons into the depression was the fact that many people was falling into debt. Many people was falling into debt and also losing there jobs. The fact that banks was not all that trustworthy was another issue on hand for the people living at that time. Many people owed money and did not have jobs to pay them back and fell into more debt. A lot of people took great advantage of credit which lead to the depression

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  12. In my opinion, the greatest factor that led to the Great Depression was the "Domino Effect".
    The Domino Effect I'm referring to consisted of The Government, the Farmers, and the people. What occurred was that Farmers were over-producing in their individual crops. What crippled them more-so was that they didn't know how to do anything else and the crops weren't selling for a good price anymore. Money for the farmers became scarce and the farmers couldn't even to support themselves.of course, the government had to step in. Feeling like money was the way to go, the government gave them money over and over again. This was only a short-term relief. Soon enough, the government realized their money was running out and what they really needed was permanent solution; Concrete. Sadly, the government realized this too late and eventually couldn't afford to support the farmers. Now were at a point were the Farmers can't support themselves because of over-production, The Government can't continue to support the farmers and the people need the crops still. What ends up happening is that, instead of over-producing, the farmers are now not producing anything which is worse. Crops are now a rare commodity which are to expensive for the average man to afford.

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